1. United States Coast Guard Marine Safety, Security, and Stewardship U.S. Coast Guard INTERTANKO North American Panel Presentation Jeff Lantz Director of Commercial Regulations and Standards March 21, 2011

2. United States Coast Guard Marine Safety, Security, and Stewardship Port State Control 9,260 individual vessels, from 92 different Flag Administrations, made 81,712 U.S. port calls – U.S. ports saw vessel arrivals increase by approximately 8% Goal: eliminate substandard shipping – Performance based targeting system: U.S. Port State Control Matrix targets – Flag, Recognized Org, Class Society, & Ship Mgmt/Charterers. Challenge: – Ships larger/ more complex – Consequences of failure greater – Effects of Economic downturn? Change in trading patterns?

3. United States Coast Guard Marine Safety, Security, and Stewardship Detentions Other Options: – Denial of Entry/Suspend Cargo Ops/Expel from port – New Vessel Banning Policy- minimum of 3 months Typical reasons: – Firefighting – Marine Pollution (including environmental crimes) – Propulsion & Machinery – ISM Code Relatively low detention ratio: 1.87%

4. United States Coast Guard Marine Safety, Security, and Stewardship 2010 Detainable Deficiencies Firefighting Appliances18% Propulsion & Aux Machinery15% Marine Pollution12% ISM Related Deficiencies9% Lifesaving Appliances9% Loadline7% ISPS7% Safety, General6% Crew5% Other12%

5. United States Coast Guard Marine Safety, Security, and Stewardship 2010 PSC Statistics 200820092010 3-Year Average Detention Ratio 1.75%1.92%1.87% 3% PSC Detentions176161156 3% PSC Examinations11,5829,6579,907 3% ISPS Major Control Actions 271817 6% ISPS Examinations9,4918,7258,906 2% Note: Decrease in arrivals and examinations affects the overall detention average. In 2009, 8557 distinct arrivals.

6. United States Coast Guard Marine Safety, Security, and Stewardship Improved Performance Port State Control Targeting Flag States that have improved performance and are not longer targeted in 2011 SafetySecurity BahamasSaint Vincent and the Grenadines Chile Netherlands Russian Federation

7. United States Coast Guard Marine Safety, Security, and Stewardship Rewarding the Best QUALSHIP 21 – Rewards Highest Performing vessels flagged by an eligible Flag Administration – Subject to fewer CG inspections – Internationally recognized program sought out by charterers, etc – Difficult criteria must be met through vessel performance, flag performance, etc – Only 342 vessels enrolled Flag States that are QUALSHIP 21 eligible in 2011 BarbadosIsle of ManRussian Federation CanadaJapanSweden Denmark LiberiaSwitzerland FranceMalaysiaThailand GermanyMarshall IslandsUnited Kingdom GreeceNorwayVanuatu Hong Kong

8. United States Coast Guard Marine Safety, Security, and Stewardship Vessel Banning Policy USCG Banning Policy is set forth in CG-543 Policy Letter, dated September 1, 2010 Outlines procedures for denying entry of identified (banned) foreign vessels from a Port or place in the U.S. Intended to deter substandard vessels and companies from changing shipping routes or Flag Administrations to avoid the PSC program Based upon compliance of vessel with the ISM Code 8

9. United States Coast Guard Marine Safety, Security, and Stewardship Overview of Banning Procedures 1.3 detentions in a 12 month period – vessel will be reviewed closely by U.S. Coast Guard Headquarters to determine if vessel meets criteria 2.Clearly documented cases of ISM Code non-compliance indicating a failure of the Safety Management System is a key factor in U.S. Coast Guard Headquarters’ determination 3.If banned, U.S. Coast Guard Headquarters issues Letter of Denial w/conditions to the Owner/Operator, Flag Administration and Coast Guard units. Vessel is banned for a minimum of 3 months – regardless if conditions for removal of ban are satisfied earlier then the 3 month timeline. 4.Banning remains in effect until removed by U.S. Coast Guard Headquarters, regardless of status of vessel (change of Flag, RO or operating status) 5.If vessel takes corrective actions, U.S. Coast Guard issues Letter of Acceptance; Immediately upon return to U.S. waters, an offshore PSC exam is required. 6.If found non-compliant again, the Coast Guard will review the detention and may issue another Letter of Denial; vessel would be banned for no less than 12 months 7.Vessels “Banned” may still transit US waters due to Force Majeure or Innocent Passage 9

10. United States Coast Guard Marine Safety, Security, and Stewardship Conditions of Entry Cambodia* Cameroon* Congo, Republic of* Cuba Equatorial Guinea* Guinea-Bissau Indonesia* Iran * contains some exempted ports Liberia* Madagascar Mauritania* Sao Tome and Principe Syria Timor-Leste, Democratic Republic Venezuela

11. United States Coast Guard Marine Safety, Security, and Stewardship Vessel General Permit VGP MOU outlines coordination and cooperation between EPA and the USCG MOU provides division of labor – USCG – compliance examinations – EPA – enforcement 11

12. United States Coast Guard Marine Safety, Security, and Stewardship Vessel General Permit The Permitting Program for Vessels - National Pollution Discharge Elimination System Covers Normal Operational Discharges Vessels subject to VGP must be in compliance now 12

13. United States Coast Guard Marine Safety, Security, and Stewardship Regulatory Update Workload Review process – Significant/Non-significant – OMB/DHS High priority regulations – STCW – Ballast Water (VGP Settlement) – Non-tank Vessel Response Plans – Towing Vessels

14. United States Coast Guard Marine Safety, Security, and Stewardship Regulatory Update EO 13563 – “Improving Regulation and Regulatory Review” Federal Register Notice – 76FR13526 dated 14 March 2011

15. United States Coast Guard Marine Safety, Security, and Stewardship Japanese Fukushima Power Plant Incident Maritime Transit Advisory – Coast Guard, MARAD and NOAA - HYDROPAC and NAVAREA XII message to mariners Do not expect harmful levels to reach the US The US has necessary screening protocols in place for inbound vessels, cargo and people should further examination be required

16. United States Coast Guard Marine Safety, Security, and Stewardship KANDA, FUKUOKA SHIMIZU TOKYO KASHIMA, IBARAKI OSAKA TOYOHASHI NAGOYA AICHI KOBE CHIBA YOKOHAMA FUKUSHIMA DAIICHI POWER PLANT PROXIMITY TO POWER PLANT (APPROX) CLOSEST – 100 MILES FARTHEST – 600+ MILES 101 MILES 132 MILES 154 MILES 139 MILES 282 MILES 375 MILES 281 MILES 362 MILES 617 MILES 214 MILES

17. United States Coast Guard Marine Safety, Security, and Stewardship IMO Update EU Mutual recognition Code for Implementation of Mandatory Instruments – mandatory audit scheme to tell how countries are giving complete effect to mandatory IMO instruments Recognized Organization Code – govern the actions of recognized organizations (classification societies)

18. United States Coast Guard Marine Safety, Security, and Stewardship Questions Thank you